Diabetic Nephropathy (DN) is the largest single cause of end-stage renal disease in the United States. Current therapies for diabetes are not effective in reversing established complications such as DN. We have recently reported a new murine model of DN, the BTBR mouse strain with the ob/ob leptin deficiency mutation that closely resembles human DN including early loss of podocytes (podo). We present preliminary data clearly demonstrating that reversibility of nephropathy can be achieved in our model. In this proposal, we build upon these observations to define and optimize strategies for reversal of DN with a focus on two fundamental mechanisms that may be pivotal in the pathogenesis of DN and its reversal: depletion of podos and their regeneration. We show in our model exciting data that podocyte number can be restored with reversal of DN. In our first specific aim, we develop a strategy to identify the source of the regenerating podos. Using lineage tracing studies, we will test whether neighboring parietal epithelial cells PECs can serve as a local progenitor cell niche for regenerating podos. We will test several interventions including commonly used therapies for human DN to test whether their lack of efficacy for reversal of DN is linked with their inability to promote restoration of podo #. We will extend our observations to human kidney biopsies of DN to directly translate our observations in mice to the human disease. In our second specific aim, we will investigate mechanisms that potentiate podo loss and those that facilitate regeneration, focusing on injury induced by mitochondrial oxidative stress induced by reactive oxygen species (mtROS), considered a principal cause of podocyte injury in DN. We utilize strategies of podocyte specific and systemic scavenging of mtROS to test whether these approaches can abrogate progression of DN and/or promote its reversal in conjunction with restoration of podo #. We pursue these strategies both by creation of transgenic mice that inducibly overexpress the ROS scavenger catalase in a mitochondrially restricted fashion, as well as by administration of novel peptides characterized by their ability to reduce mitochondrial oxidative stress. In aggregate, the proposed studies will enable testing of our central hypothesis: loss of podos is an early and proximate step in the development of the characteristic lesions of DN, that further podo loss and renewal are concurrently active processes, that prevention of podo loss substantially limits the development of DN, and ultimately that repair of DN requires restoration of podo number. The impact of these studies will be 1) to establish new paradigms that podo regeneration in DN can be achieved, and that place a new emphasis on PECs in the evolution and repair of DN. 2) to establish for the first time a mechanism by which podo regeneration is accomplished and by which reversal of DN may be achieved, by employing highly specific tests of whether mtROS injuries to podos are causal and required for the development of DN. 3) If successful, restoration of podo loss by a novel small molecule inhibitor of mtROS could serve as a proof of principle for a new class of therapeutic agents with potential to reverse human DN.